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The Central Bank of Nigeria (CBN) has set a minimum capital of N50 million for Tier 2 unit microfinance banks. The apex bank made this known in a reviewed circular of the circular it had earlier issued to the microfinance banks on Monday, October 22, 2018.

In the circular, CBN maintained that Tier 2 unit microfinance banks must have a minimum capital of N50 million, while Tier 1 would maintain the N200 million minimum capital introduced for unit microfinance banks.

The CBN also stated in the circular that it had adjusted the time frame given to the different categories of microfinance banks to recapitalise. The different categories are the unit, state, and national operators.

 “The Central Bank of Nigeria revised the categories of microfinance banks with a view to ensuring continued operations of microfinance banks in the rural, unbanked and underbanked areas of the economy.

“The unit microfinance banks shall comprise two Tiers: Tier 1 unit microfinance bank which shall operate in the urban and high-density banked areas of the society; and Tier 2 unit microfinance banks which shall operate only in the rural, unbanked or underbanked areas.” -CBN

Revised minimum capital requirement for categories of microfinance banks

The CBN stated that Tier 1 unit microfinance banks must meet a N100 million capital threshold by April 2020 and N200 million by April 2021.

Tier 2 unit microfinance banks, it added, must meet a N35 million capital threshold by April 2020 and N50 million by April 2021.

The CBN stated that state microfinance banks must increase their capital to N500 million by April 2020 and N1 billion by April 2021.

A national microfinance bank must hold a capital of N3.5 billion by April 2020 and N5 billion by April 2021, it added.

Meanwhile, before the apex bank commenced the recapitalisation of the microfinance institutions in 2018, the minimum capital base for national microfinance banks was N2 billion, state microfinance banks was N100 million, while the unit microfinance banks had a minimum capital requirement of N20 million.


  1. Given the micro-economic environment in which the MFBs are expected to operate, the reclassification of MFBs’ minimum capital into Tiers 1 & 2 is a healthy development; the Central Bank of Nigeria’s supervisory role is once again put to test as it relates to the management of Nigeria’s financial system.


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